Master service agreement: negotiate once, order many times

A master service agreement — an MSA — is the contract you sign once with a supplier or a client so that every subsequent piece of work can be commissioned in a page rather than renegotiated from scratch. It carries the terms that do not change from job to job: liability, intellectual property, confidentiality, payment terms, termination. The individual work goes underneath it, usually as a statement of work, and the split between the two is where most of the value and most of the mistakes live.

What belongs in the master service agreement

• The parties, and whether affiliates or group companies can order under it — a detail that decides whether you renegotiate when the client reorganises.
• Liability: the cap, what sits outside the cap, and whether the cap is per claim or in aggregate across the whole relationship.
• Intellectual property: who owns what is created, what is licensed rather than assigned, and what background IP each side keeps.
• Confidentiality, unless a separate non disclosure agreement already covers it — having both, with different definitions, is a common and avoidable conflict.
• Payment terms, invoicing mechanics and what happens on late payment.
• Termination: for convenience, for breach, notice periods, and what happens to work in progress.
• Data protection, where personal data is involved, usually by incorporating a data processing agreement rather than restating it.

What belongs in the order, not the agreement

1. Scope, deliverables and acceptance criteria — everything that is specific to this piece of work.
2. Price and schedule for this engagement, including any rates that differ from the standard ones.
3. Named people, where continuity of a particular individual matters.
4. Anything genuinely bespoke, flagged explicitly as varying the master terms rather than buried in prose.
5. Keep the order short. If your statement of work is twelve pages of legal terms, the master agreement is not doing its job.

The order of precedence clause is the one nobody reads and everybody eventually needs. State plainly whether the master agreement or the individual order wins when they conflict. The usual answer is that the master wins except where the order expressly says it is varying a named clause — which stops a project manager from accidentally rewriting your liability cap in a scope document.

Where master agreements go wrong

• Signed and forgotten: nobody knows what was agreed, so each project renegotiates anyway and the MSA becomes decoration.
• An unlimited or uncapped liability accepted to close a deal, then applied to a hundred subsequent orders nobody reviewed.
• Auto-renewal with no owner watching the date, which is the single most common cause of an unwanted extra year.
• IP terms written for one kind of work and then used for another — code, design and research have genuinely different needs.
• No mechanism for changing rates, so a three-year agreement locks in prices that stop making sense in year two.

Where the agreement lives

Ettex Signature handles the signing and keeps the executed version with its date and signatories, which is what you need when someone asks two years later which terms were in force. Keep every order under it linked to the same record rather than filed by project, so the question "what have we agreed with this company in total" has one answer. Where volumes grow past what one person can track, contract management software is the next step, and the renewal dates are usually what forces it. Ettex does not draft agreements and this is not legal advice — an MSA allocates real risk and is worth a lawyer’s time.